The apartment rental landscape is changing. Utility costs are rising, creating the need for improved energy management. And while inflated home ownership costs are driving increased rental demand, a fact that might suggest more profitable investment returns for owners of apartment buildings, the growing cost of utilities is an ongoing challenge to building management bottom lines.
In the coming years, for instance, electrical costs in Canada are forecasted to increase dramatically. A report from the Canadian Gas Association suggests national Canadian energy costs will increase by approximately $580 billion and $1.4 trillion between 2020 and 2050. Inflation like this applies significant pressure on both apartment building owners and their operational budgets.
We know that buildings, especially multifamily dwellings, consume a tremendous amount of energy. In fact, all of Canada’s buildings make up approximately 33 per cent of the country’s energy use. We also know that the cost of energy consumption can make up 30 – 40 per cent of an apartment building’s operating budget. This energy (electricity and gas) is primarily consumed by the building’s heating, ventilation and air conditioning (HVAC) equipment.
Given the forecasted increases in energy costs, traditional means of managing energy consumption and costs will quickly become unsustainable. This is a staggering amount of a building’s operational budget being consumed by electricity, gas and water. Maintaining profitability will require more efficient energy management solutions. When current property management practices intersect with emerging technologies, we have the potential for significant energy savings, improved comfort and enhanced mechanical service response.
Using information technology (IT) to increase property efficiency and tenant engagement is known as property technology—or, “proptech”. It’s a new approach to more traditional, manual building operations and tenant engagement methods. In this case, proptech is modernizing apartment building boiler rooms and streamlining manual monitoring of apartment energy use, temperature control and equipment performance.
For both new and tenured property managers, exploring property technology that can help improve building operations financially and mechanically can seem intimidating at first. Where do you start? What is the best investment for your tenants and the age and style of your building? Retrofits are costly, solar panels are a big investment and not practical, and installation of some solutions can potentially be intrusive for tenants.
Artificial intelligence (AI) and big data have made their way into many aspects of our lives. Energy management platforms (EMPs) are no different. EMPs attach to existing HVAC equipment, collecting data about a building’s energy use and the AI “learns” about the building, helping to identify and address opportunities for improved efficiency. Even dated boiler rooms and equipment can typically accommodate these smart systems.
How do EMPs work?
During an initial assessment building experts can identify what energy capacity a property currently has, where inefficiencies exist and, with the correct software implementation and efficiency equations, what opportunities there are for a property to realize energy and energy cost savings in the future.
Once the assessment has been completed and reviewed with the apartment building owner, installation can begin. Installation involves attaching smart sensors and controllers to current equipment, all of which requires very little capital investment in comparison to a full equipment retrofit.
With new sensors collecting the building’s operational and energy use data, information is sent to the cloud. There, it uses advanced algorithms to calculate the best HVAC settings for the building under various conditions. A lean hardware automation system is all that is needed to carry out dynamic changes that can be generated from the cloud. The changes in the building can typically be undertaken in less than a month with virtually no disruption in building operation.
Like anything that’s learning to perform better, a report card on performance can demonstrate areas where there have been significant improvements made. EMPs can produce a monthly savings report that illustrates savings and energy performance. Keeping tabs on building operations manually is both inefficient and impractical. Ensuring management has a pulse on a building’s internal nervous system is key to smoothly operating a contemporary property, ensuring focus can be redirected to more immediate resident needs. Having greater visibility into a building’s energy performance offers managers peace of mind.
Improved operational efficiency can also mean an overall better value rating for your property. Assessing the value of your apartment building and measuring it against your current operational budget might reveal how much value can be gained by making smart business investments into technological modifications.
As 2020 nears, apartment building owners are faced with revaluating budgets for the upcoming fiscal year, and evaluating what areas of investment are worth time and money. Incorporating smart, AI-driven technology into your future operational plans can help produce better financial returns. Going into 2020 with better savings projections is certainly an attractive way to ring in both a new year and a new approach to efficient energy management.
For more information, visit http://www.paritygo.com